Family psychoeducation (PE) has become recognized as a highly effective intervention for families of schizophrenic patients. The basic principle of PE intervention is the creation and maintenance of a calm environment that provides positive reinforcement, modulated interactional intensity, individualized motivational assessment, graduated performance expectations, limit setting, warmth and humor. Since supervised residences can provide a family-like setting, PE intervention in the form of weekly resident groups should contribute to better outcome for patients living in these residences. Demonstration of efficacy will support the development of PE intervention programs for the expending population (over 300,000 nationwide) of adults with severe mental illness (SMI) living in board and care, adult or group homes, halfway houses, community residences, foster care and supportive apartments. The proposal describes a randomized controlled clinical trial of PE intervention, the subjects being adults with SMI admitted to an extended- care supervised residence. The proportion of residents with schzophrenic diagnoses is estimated to be 75%, and the proportion hospitalized for greater than one year will be 80%. Newly admitted residents will be randomly allocated to experimental (N=122) and control groups (N=122). Both experimental and control groups will receive standard psychosocial programming, creating an A vs. A+B experimental design. The hypothesis is that experimental group residents will experience better outcome than control group residents in social climate, symptom control, role functioning and community tenure. Assessments will occur at baseline and every six months up to two years.